UK - Music publisher Boosey & Hawkes is guaranteeing to underwrite falls in its pension scheme's equity portfolio to stop trustees moving assets into gilts.
The firm told trustees it will cover any costs arising from further falls in the stock market provided the £22m final salary scheme retains an equity holding.
The employer will also increase its pension contributions by £30,000 per month from October and by a further £75,000 from January 2004. It has also agreed to pay £2.95m into the scheme if it is subject to a takeover before September 2003.
Group company secretary Andrew Nash said trustees were concerned about “uncertainty” surrounding the sale of the remainder of the business and wanted to move out of equities.
“The trustees were looking at the value of the pension fund and questioned what would be the best investment policy to have because of that uncertainty.
“The decision was that a gilt-matching route would be the best option, but that would put greater pressure on the employer for contributions.”
The trustees’ concerns follow the sale of Boosey & Hawkes’s musical instruments business in February when a one-off payment of £450,000 was made into the scheme to cover the division’s pension liabilities.
The scheme, which has 115 active, 263 deferred and 349 pensioner members, has 55% of its assets invested in bonds.
The company confirmed the scheme was in deficit but declined to disclose the size.
Boosey & Hawkes increased employer contributions to the scheme from 14% to 16.7% at the end of last year.
Investors, driven by depressed interest rates, slower global economic growth and rich equity market valuations are examining non-traditional investment opportunities.
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up